When it comes to desktop software and web-based applications, consumers
are used to shelling out money for additional features. There are
multiple versions of software packages, for instance, and many paid web
services offer different features at different prices.

It’s a model that might soon be coming to the hardware market. Over the
weekend, news broke that Intel has begun selling computers equipped with
its Pentium G6951 processor with a $50 “processor performance upgrade
card. As the name implies, the card enables the owner of a computer with
a Pentium G6951 processor to “upgrade” the capabilities of the
processor, for a price.

Not surprisingly, Intel’s model has sparked a visceral reaction from the tech-savvy. CrunchGear’s John Biggs echoes complaints heard ’round the blogosphere:

By offering a $50 upgrade to a processor, the average computer manufacturer will see a way to nickel and dime the consumer by forcing further important upgrades. Need to unlock some graphics card memory? $25. Need a faster hard drive buffer? $1.99 per minute, please. The margins on PCs and laptops are so slow that anything that can force a few pennies out of the customers pocket is fair game.

Valid concerns? In my opinion, probably not. We’re not going to see come-ons to unlock graphics card memory, or hard drive buffers, etc. That’s the slippery slope fallacy at work.

In all actuality, Intel’s move actually has the potential to benefit consumers. Here’s why:

  • The computers are sold promoting the ‘locked’ spec. There is no bait and switch here; nobody is being led to believe that the increased firepower that is offered for an extra $50 comes standard.
  • Consumers are paying for the locked spec. A computer with the unlocked spec would cost more. In other words, if you want a more powerful processor, you typically have to purchase a more expensive computer. Here, Intel is doing little more than offering two PC configurations, at two prices, in one machine. Since the typical consumer with basic computing needs will probably be just fine with two-way multithreading and an average cache anyway, the $50 upgrade will likely only be of interest to a relatively small subset of buyers.
  • It adds convenience. Instead of leaving mainstream consumers with little choice but to upgrade to an entirely new machine, Intel is giving consumers the ability to upgrade to a slightly more powerful machine without having to ditch the machine they already have.

In other words, far from being abusive, Intel’s model offers consumers greater choice and flexibility.

Of course, Intel isn’t providing this out of the goodness of its heart. It stands to benefit as well. It can essentially manufacture and sell two processor models in one, which creates some economic efficiencies. That’s particularly important given that the Pentium G6951 is at the lower end of the market, where price sensitivity is highest. As some buyers of the locked spec become more sophisticated, they may opt to pay the $50 to upgrade, when they would have otherwise held off on buying a more powerful computer.

Possible benefits to consumers and Intel aside, the company’s model no doubt comes with some PR risk. Consumers might be used to paying for software extras, but hardware feels different. If you learn that the processor you bought has certain capabilities, but some are disabled until you shell out an extra $50, it might upset you. But I’m not sure the mainstream consumer will look at it that way, and for the techies, it’s unlikely that this same model will be applied to Intel’s higher-end processors.

Photo credit: rox sm via Flickr.